Victoria Cumings, Chief Legal & Regulatory Officer, and Daniel Heller, Head of Regulatory Strategy at RTGS.global, share their insight with Payment Expert on how the The Financial Stability Board (FSB), is looking to ‘pave the way’ for enhancing cross border payments.
The FSB has made tremendous strides since 2020 to lay the groundwork for achieving the goals of the G20’s Roadmap for Enhancing Cross-border Payments. In February, the FSB published its latest report outlining “priority actions” for the coming years. With the focus now on implementation of practical projects, the time is ripe for the crucial partnership between the public and private sector to be employed to its fullest; this will ensure the continued collaboration and investment needed to deliver successful and tangible outcomes by the end of 2027.
Clearly, both factions have important roles to play in bringing to fruition the joint sector vision to enhance cross-border payments. Indeed, private sector stakeholders have had the opportunity – via participation in various conversations, working groups and surveys, and written responses to consultative reports – to help shape the work undertaken by the various Roadmap streams. We ourselves have been grateful to contribute input to Building Block 9, Facilitating increased adoption of PvP, and Building Block 3, Defining Common Features of Cross-Border Payment Service Levels. The public sector, too, has been busy. The G20, after all, provided the initial catalyst for change in endorsing the Roadmap and its goals, and, in addition to the work it has undertaken itself, the FSB cited in its Consolidated progress report for 2022 a number of illustrative examples of central bank initiatives and developments in respect of selected Roadmap Building Blocks.
A concerted and united effort
With the recent release of the FSB’s Priority Actions for Achieving the G20 Targets, all efforts should now be on driving accomplishment of the quantitative targets to address challenges in the cost, speed, transparency, and access to cross-border payments. As the FSB points out, private sector involvement and experience is, and will most certainly continue to be, an important input to this work.
What is important in any effective collaboration is ascertaining and defining the roles to be undertaken by each group, and we suggest the FSB gives sound thought to this. As the FSB rightly points out, whilst it, the Committee on Payments and Market Infrastructures (CPMI), and public sector partner organisations can exercise certain levers to support collective action, such as channelling political will and support, convening relevant bodies, providing technical support, and contributing to policymaking, it is within private sector entities that much of the action required to turn the Roadmap into a reality needs to occur.
Private sector innovators will likely, for example, provide the actual mechanisms and capabilities to enable faster, safer and less expensive cross-border payments to happen. More broadly, the private sector is well placed to advise on and illustrate practicalities of the payments landscape from a commercial and operational perspective, as well as provide valuable context for the public sector to consider when assessing alignment of policies and regulations. Importantly, private sector firms also contribute novel ideas and fresh perspectives. This is what drives modernization, turning concepts, though collaboration with and support from the public sector, into viable new solutions.
We urge the public sector to foster involvement from the private sector and to include the private sector as much as possible in the ongoing initiatives and activity related to the Roadmap, in particular in the areas of PvP settlement, review of access policies for central bank accounts, and regulatory standards.
At this stage, we are encouraged by the FSB’s establishment of two new industry taskforces, inviting industry input, perspectives and expertise on legal, regulatory and supervisory frameworks as well as payment system interoperability and extension. We are also supportive of the intended FSB/CPMI annual summit of high-level stakeholders from the public and private sectors to discuss strategic issues on the Roadmap.
Built for now, designed for what’s next
At RTGS.global, in taking up the industry call to action, we work hard every day to help advance the FSB’s goals in addressing the high cost and inefficiencies still challenging cross-border payments, and the frictions in existing processes contributing to them. Our service model is built to enable immediate cross-border payment-versus-payment settlement of FX transactions in all currencies 24x7x365, safely, and securely. In taking what works well, but improving on it, we have built a new FMI which not only solves for today’s challenges but is adaptable enough to accommodate the payments landscape of the future; a must in this ever-evolving space.
A future that is collaborative and bright
Ultimately, successfully implementing the Roadmap changes will require ongoing close collaboration and coordination between the public and private sector. We look forward to working with public bodies and central banks globally, as well as other industry stakeholders, to contribute to the ongoing efforts to improve and enhance cross-border payments.